Container Store Q4 profit drops; will open nine new stores

Coppell, Texas – Higher selling, general and administrative (SG&A expenses) helped drive down net income at The Container Store Inc. during the fourth quarter of fiscal 2014, and the retailer expects open nine new stores and relocate one store during fiscal 2015. The Container Store reported net income of $13 million, down 29% from $18.3 million in the same quarter the prior year.



Net sales totaled $224.26 million, up 3% from $216.82 million. Same-store sales dropped 0.8%.



Kip Tindell, chairman and CEO of The Container Store, said the impact of bad weather on the retailer’s Swedish Elfa subsidiary had a negative effect on fourth quarter performance.



“Our fourth quarter did not conclude according to early-in-the-quarter trends,” said Tindell. “Weather was a contributing factor, as we experienced winter storms in February during the vitally important last four days of our 50-day Annual Elfa Sale and during the last week of our 19-day sale’s extension. Additionally, a stronger U.S. dollar had a significant impact on the conversion of our Elfa subsidiary sales. Weather and foreign exchange headwinds aside, our sales performance fell short of our expectations in fourth quarter and in fiscal 2014.”



During the full fiscal year, The Container Store almost tripled net income to $22.67 million from $8.16 million the prior fiscal year. Net sales increased 4% to $781.87 million, from $748.54 million. Same-store sales fell 1.4%.



For the first quarter of fiscal 2015, The Container Store expects same-store sales to be down 3% to 4% including an estimated 1% impact associated with the West Coast port delays. For fiscal 2015, consolidated net sales are expected to be $800 million to $815 million, based on the company’s expected store openings and a same-store sales change of -2% to 0%.